X-linked hypophosphatemic rickets (XLH) is a dominant disorder caused by inactivating mutations of PEX, a novel endopeptidase of unknown function. The molecular/biochemical events that link loss-of-function mutations of PEX to impaired mineralization and phosphaturia in XLH are poorly understood. We have compelling data that osteoblasts are a physiologically relevant site of PEX expression. In addition, we have identified putative substrates for Pex in osteoblast cultures, including inhibitors of mineralization and renal tubular phosphate transport. These findings suggest that osteoblasts are directly involved in the pathogenesis of XLH. Our current goal is to advance our hypothesis that Pex in the mature osteoblast plays an important role in regulating mineralization of extracellular matrix and possibly phosphate homeostasis. Based on our recent isolation and cloning of the full-length Pex coding sequence from an osteoblast cDNA library, and our demonstration of an intrinsic mineralization defect in immortalized osteoblasts derived from the hyp-mouse homologue of XLH, it is possible for the first time to express recombinant Pex and study its function in a physiologically relevant model system. Our Specific Aims are to: (1) Characterize the structure and activity of recombinant Pex (rPex) and (2) Establish a cause and effect relationship between Pex mutations in osteoblasts and impaired mineralization of extracellular matrix. For the first aim, we will generate rPex protein and isolate synthetic peptide substrates by screening a random phage substrate library with rPex. These substrates will be used to investigate the activity of both wild-type and mutated Pex proteins in vitro and in osteoblast cultures. For the second aim, the function of Pex in osteoblasts will be examined in tissue cultures and in transgenic animals. Using retroviral mediated expression of Pex, we will overexpress wild-type Pex in hyp-mice osteoblast cultures to attempt correction of the mineralization defect in vitro. Using a complementary transgenic mouse approach, we will determine the ability of Pex expression in osteoblasts to rescue the HYP phenotype. We will achieve osteoblast-specific overexpression of the Pex transgene using the mouse osteocalcin promoter and evaluate whether the selective correction of the Pex abnormality in osteoblasts normalizes mineralization and phosphate homeostasis in hyp-mice. These studies will provide insights into the function of Pex in osteoblasts, explore the mechanisms whereby abnormalities of Pex lead to impaired mineralization and phosphaturia, and define the mechanism of dominant inheritance in XLH. These results are fundamental to the future development of drug and/or gene therapy, whose design is predicated upon an understanding of the role of the osteoblast in the pathogenesis of XLH and the importance of Pex in regulating osteoblast-mediated mineralization. The study of Pex may yield an entirely new view of mineral metabolism.